which credit card to pay first

Morgstar

hi i could do with some advice about the best way to pay off my credit cards.

i have 3 with balances as follows

£6200 natwest
£2880 santndar
£2300 capital one


the sandantar card is currently on 12months interest free on transfer balance.

I have £550per month available to pay towards these, which is best way to go, advice would be greatly appriciated.

thanks

Essex22011

What's the interest rates on the cards?

Morgstar

natwest 17.9% APR credit limit £6600
santandar 17.9% credit limit £3000
capital one 19.8% credit limit £3300

opinions4u

Minimum payment plus £1 on the cheapest cards.

Throw everything else at the most expensive card.

chattychappy

opinions4u wrote: »

Minimum payment plus £1 on the cheapest cards.

Throw everything else at the most expensive card.

Agree in principle, but disagree in this case. Santander, in my experience, are very good at existing customer deals and the interest rates that the OP are on are pretty similar.

So I would prioritise paying off Santander. Once that balance is cleared, the OP has a good chance of getting a BT offer which could be used to take some of balance off the other cards.

(Natwest are also pretty good at existing deals, but the OP would take longer to clear that balance.)

Gromitt

Even though 'the sandantar card is currently on 12months interest free' ? So already has a balance transferred to it I assume?

So make the minimum + £1 on this one and concentrate on the others?

Essex22011

opinions4u wrote: »

Minimum payment plus £1 on the cheapest cards.

Throw everything else at the most expensive card.

Agree with above, capital one first.

pmartin86

How long is left on the 0% BT of the Santander card?

As much as it contradicts what has been said above, i would focus on reducing the Natwest balance first to a more reasonable leve, then hitting the capital one card after the balance are moer or less equal. You aslo want to make sure you try to pay off the santander card in full before the BT end if possible.
My justification this is that hitting the higher interest card first only really works if you assume the balance is the same, with the natwest card being considerably higher balance, your apying considerably more interest on that, approximatly £92 a month, where as the capital one card is only around the £38 a month.

In short

1. Work out how many months you have left on the 0%, divide the total outstanding by the number of months and make that payment each month to santander.

2. Make minimum payment plus £1 to capital one

3. Pay as much as possible to Natwest UNTIL your balances come more into line with each other, as only 2% difference in the rate, assuming you retain a £2300 balance on the capital one, it will be more profitable for you to pay nawest untill the natwest card hits around the £2500 mark, at this point switch your attention to capital one.

Regards
Paul

Edit: Of course, if you wanted to, you could then work it out monthly how much interest on each balance and pay them accordingly, but for simplicitys sake and the few pence/pound its probably worth just hitting the one.

doconner

This is a useful way to visual how snowballing your payments will quickly eat away at what may seem like an overwhelming amount of debt.

edit: unable to post link, but google search for: "whats the cost snowball calculator" will return what I wanted to link to as the top link.

- D

chattychappy

Gromitt wrote: »

Even though 'the sandantar card is currently on 12months interest free' ? So already has a balance transferred to it I assume?

So make the minimum + £1 on this one and concentrate on the others?

Oh yes of course. I wouldn't pay down Santander unless near the end of the deal.

CLAPTON

pmartin86 wrote: »

How long is left on the 0% BT of the Santander card?

As much as it contradicts what has been said above, i would focus on reducing the Natwest balance first to a more reasonable leve, then hitting the capital one card after the balance are moer or less equal. You aslo want to make sure you try to pay off the santander card in full before the BT end if possible.
My justification this is that hitting the higher interest card first only really works if you assume the balance is the same, with the natwest card being considerably higher balance, your apying considerably more interest on that, approximatly £92 a month, where as the capital one card is only around the £38 a month.

In short

1. Work out how many months you have left on the 0%, divide the total outstanding by the number of months and make that payment each month to santander.

2. Make minimum payment plus £1 to capital one

3. Pay as much as possible to Natwest UNTIL your balances come more into line with each other, as only 2% difference in the rate, assuming you retain a £2300 balance on the capital one, it will be more profitable for you to pay nawest untill the natwest card hits around the £2500 mark, at this point switch your attention to capital one.

Regards
Paul

Edit: Of course, if you wanted to, you could then work it out monthly how much interest on each balance and pay them accordingly, but for simplicitys sake and the few pence/pound its probably worth just hitting the one.

sadly this is total nonsense

for any given amount of money available, to pay the maximum against the highest APR is the correct strategy.
this will mean you pay less interest each month and clear the total debt more quickly and at less overall cost.